The US has broadly agreed to grant India a waiver from Iran sanctions on account of Iranian nuclear programme for some time, allowing Indian companies to continue to import about 1.25 million tonnes of oil a month. As two Indian companies are importing oil from Iran, India was expecting tough measures from the US on oil import. However, the US has extended a waiver to some countries in trade with Iran.
The Indian media is claiming that India is also among those countries that include China, Italy, Greece, Japan, South Korea, Taiwan and Turkey, allowing them to continue buying the Iranian oil without consequences for six months.
Reports say that India had imported about 22 million tonnes of crude oil from Iran in 2017-18. But its plans to increase the imports to 30 million tonnes in 2018-19 were hurt by the US sanctions imposed on Iranian nuclear programme.
Now the Indian firms have got a waiver from the US, allowing them to import 1.25 million tonnes a month up to March 2019. According to reports, the Indian Oil Corp will lift six million barrels of Iranian oil while the Mangalore Refinery and Petrochemicals Ltd three million barrels in November 2018.
Iran, India's third-largest oil supplier behind Iraq and Saudi Arabia, provides 60 days of credit for purchases, a facility not available from other countries. In 2013-14, India had bought 11 million tonnes of oil from Iran and and in 2014-15, 10.95 million tonnes. The figure rose to 12.7 million tonnes in 2015-16.
The Indians have reportedly told the US that they had a concise payment mechanism with regard to oil imports from Iran. It is likely that India will make payment to Iran in terms of euro and rupees.
US Secretary of State Mike Pompeo recently said in India that the Trump administration wanted buyers of Iranian oil to end their imports though it would consider a waiver for Indian imports in this regard.
The Indian foreign minister had earlier stated that her country followed sanctions imposed by the UN and not any other country. Meanwhile, the European Union is working on the creation of a special purpose vehicle to facilitate trade with Iran.
According to some observers, the waiver to India is a retreat and humiliation of US President Trump as India has again hoodwinked the US. Moreover, the Indian media also claims that such facilitation will be till India goes to polls in 2019. Such claim is aimed at neutralizing the embarrassment due to Trump’s refusal to attend the Republic Day gathering in India.
On the other hand, CAATSA -- the Countering America's Adversaries Through Sanctions Act -- allows the US to hurt Moscow's dealings with many countries buying Russian weapons. India is vulnerable to Section 231 of the new law, which imposes sanctions on individuals and countries that deal with Russia's intelligence and defence sectors.
The US is granting favours to India as it thinks sanctions and American interference in India's defence procurement policies "will create a backlash in India and torpedo the growing strategic and defence partnership between New Delhi and Washington." The US backtracking on India's S-400 missile deal shows the impotence of CAATSA. The waivers and granting favours to India has made a mockery of the US sanctions and laws.
